TMI Blog1980 (10) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... the said amount arose entirely in the course of carrying on the assessee's business and was, therefore, taxable as income. This finding was confirmed by the AAC. A similar point having been decided by the Tribunal (Delhi Bench " DT) ") earlier, pertaining to the assessment year 1968-69 and agreeing with the reasons stated therein, the Tribunal held that these amounts represented the income of the assessee. The assessee had further forfeited the following amounts Rs. (i) Security deposits of employees forfeited 16,303 (ii) Liquidated damages for breach of contract recovered from ex-employees 6,520 ------------- 22,823 ------------- The claim of the assessee that the two items did not represent its income was negatived b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led by the assessee, pertaining to the assessment year 1969-70, was still pending before the Tribunal when the AAC allowed the expenditure in this regard, incurred during the assessment year 1970-71, and disallowed a sum of Rs. 47,539 as the said expenditure pertained to the assessment year 1969-70. The assessee, as per application dated March 5, 1974, sought permission to raise the following ground of appeal: " That the expenditure of Rs. 47,539, being an expenditure incurred under the head 'Monsoon Gift Scheme', is an expenditure incurred wholly and exclusively for the purposes of the assessee's business and the same should be directed to be allowed ..........". The assessee pointed out that the necessity of raising this ground arose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cycle Industries Ltd. v. CIT, decided on March 4, 1980-since reported in [1981] 128 ITR 60, question No. 2 has to be answered in the affirmative, that is, against the assessee and in favour of the revenue. We order accordingly. As regards question No. 1, it has been contended by the learned counsel for the assessee that a sum of Rs. 3,155 representing security deposits of the suppliers/purchasers, could not be included in the income of the assessee. 'We are unable to agree with this contention. The contracts in pursuance of which the suppliers/purchasers deposited the security deposits were admittedly in connection with the business of the assessee. The said transactions arose out of the business dealings of the assessee with the suppliers/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, either oral or documentary, before the Tribunal, and the allowance or disallowance of such evidence has to be decided by the Tribunal by passing an order giving reasons. Their Lordships of the Supreme Court in CIT v. Mahalakshmi Textile Mills Ltd. [1967] 66 ITR 710, while elaborating the appellate powers of the Tribunal under s. 33(4) of the Indian I.T. Act, 1922, held as follows (headnote): " Under section 33(4) the Appellate Tribunal is competent to pass such orders on appeal as it thinks fit. There is nothing in the Income-tax Act which restricts the Tribunal to the determination of questions raised before the departmental authorities. All questions, whether of law or of fact, which relate to the assessment of the assessee, may be r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al plea and consequently additional evidence being taken, has been given to do substantial justice between the parties. The Tribunal has to allow or disallow the additional plea and additional evidence after applying its judicial mind. The assessee pleaded that the omission to raise the aforesaid ground before the authorities below was neither wilful nor intentional. The Tribunal did not record any finding that the plea sought to be raised in the additional ground was either wilful or intentional. If the assessee had been allowed the additional ground, the assessee could legitimately plead for allowing the additional evidence by way of certified copy of the order of the AAC, passed in the proceedings for the assessment year 1970-71, to be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lordships of the Supreme Court in Addl. CIT v. Gurjargravures P. Ltd. [1978] 111 ITR 1, to contend that if the question was not raised by the assessee before the ITO and the AAC, the Tribunal had no jurisdiction to allow an additional plea being raised in appeal. This authority, in our considered opinion, is not helpful to the revenue in view of the peculiar facts and circumstances of that case. Their Lordships in Gurjargravures P. Ltd.'s case [1978] 111 ITR I recorded a categorical finding that the High Court was in error in assuming that a portion of the profit in the relevant assessment year was exempt from tax under s. 84. Their Lordships further found that the statement of the case drawn up by the Tribunal did not mention that there w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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